Five Families: The Rise, Decline, and Resurgence of America's Most Powerful Mafia Empires (41 page)

The decentralization led to fragmented, uncoordinated efforts with embarrassing consequences. Kossler and Bonavolonta discovered that probes of Genovese family rackets had been compromised by overlapping chaos. One vivid example concerned Matty the Horse Ianniello, the Genovese capo who had been at the scene of Joey Gallo’s murder at Umberto’s Clam House. Ianniello was being separately investigated and trailed by four squads engaged in six different inquiries. There were ample reasons to home in on the Horse, the borgata’s supervisor of protection kickbacks from topless bars and pornography shops in Times Square. Matty even profited from religion by exploiting Little Italy’s annual San Gennaro Feast. Seated in an office atop Umberto’s on Mulberry Street, the husky capo collected bribes from vendors seeking permission to operate food, gambling, and merchandise booths at the street festival from a front neighborhood civic group that was under the thumb of the Genovese family.

Trying to implicate Ianniello, competing surveillance teams were stumbling over each other and duplicating investigations. Even more depressing, the farcical probes had prematurely alerted Ianniello that he was a target.

Another mix-up involved a Genovese associate and big earner named Pellegrino Masselli, more popularly known in the underworld as “Butcher Boy.” While one FBI jurisdiction was looking into Masselli’s activities as a drug trafficker, hijacker, and hit man, another branch was trying to indict him for bribing politicians to obtain a multimillion-dollar subway construction contract. In a laughable episode, one group of agents was baffled as to the identity of a frequent confederate of Masselli’s. The mystery hood turned out to be an informer sent to infiltrate Masselli’s operations by another FBI unit that was working on a different case.

After several years of scrambled investigations, Matty the Horse was ultimately convicted of racketeering. The Masselli case, however, petered out in a confused
jumble many years later on minor federal charges, and in acquittals and plea deals on state indictments. Masselli and former Secretary of Labor Raymond Donovan were among those cleared in 1987 of fraud and larceny charges arising from the subway corruption case.

“It is a total disaster entangled in miles of red tape,” Kossler reported after reviewing the efforts of the three jurisdictions against the Mafia. “It’s catch as catch can, with everyone going their own way depending on what cases they feel like opening. Then it’s like a horse race to see who can come in first with an indictment.”

Neil Welch’s tenure in New York office ended abruptly, before all of his reforms were in place. A severe back ailment forced him into early retirement in 1980. His successor, Lee Laster, supported the moves begun by Welch, and he had Kossler draw up a blueprint for a drastic reorganization of Mob investigations. Bursting with ideas, Kossler produced a streamlined battle plan of 25 points. His proposals included: stripping the powers of the three regional SACs; centralizing operations by appointing one organized-crime supervisor in Manhattan; and extensive reliance on the RICO law and on Title III bugs and wiretaps to dislodge the leaders of New York’s five Mob families.

The overall plan hinged on a drastic realignment of personnel. Kossler recommended the creation of five separate organized-crime squads, each with exclusive responsibility to investigate one of the powerful borgatas. No longer would squads in the three jurisdictions go their own rivalrous ways, investigating cases or families at will. In effect, the new units—the Gambino, Genovese, Lucchese, Colombo, and Bonanno squads—would parallel the Mafia’s own organizational structure in the metropolitan area.

And, each squad would be weaned off small potatoes, inconsequential investigations. Their primary purpose would be to buttress high-level RICO inquiries and to concentrate on the Mafia’s inexhaustible and gigantic gold mine—union and industry rackets. The long-range objective was the destruction of the family kingpins and the dismantling of their economic underpinnings.

“The bottom line is that the LCN is better organized than we are and we have to match them,” Kossler reasoned. “We have to go after the hierarchies, seize their assets, change their culture. We can’t allow these guys to endlessly pass the reins on to the next guy. In the past if we did convict a reasonably big player, all we accomplished was to create a vacancy—a career opportunity—for a younger guy to get a promotion.”

Kossler’s entire plan—his 25 points—was reviewed and approved in less
than a month by Judge William Webster. The FBI director’s alacrity astonished Kossler. It was a signal that along with Cold War espionage, the Mafia now was a high priority for the bureau. Webster gave another invaluable asset to New York by allowing it to use super-secret cameras and listening devices to spy on the Mafia. Previously, the sensitive equipment had been restricted to counterespionage cases. The equipment would reinforce a “special operations” group established solely to penetrate the five borgatas through extraordinary electronic and surveillance projects. The group was led by an imaginative ex-Marine officer and Vietnam veteran, James Kallstrom, an avid supporter of employing new RICO stratagems.

In the revamped organizational setup, Jim Kossler was promoted from “staff program manager” to Coordinating Supervisor for Organized Crime. He became the point man for overseeing Mob investigations. The consolidated five family-based squads were soon in place, but agents had to be reeducated about new goals and tactics, particularly the emphasis on labor racketeering. Before 1980, bread-and-butter work for mafiosi investigators consisted of standard extortion, gambling, and loan-sharking arrests and convictions. Normally, these cases were wrapped up with testimony from a victim, a recorded conversation of a shake-down, or a raid at a bookmaker’s wire room. Labor rackets, however, were a different undertaking. These investigations were complex, requiring interpretations of recondite union rules, and uncovering secret deals between mobsters and corrupt union and management officials. Finally, to clinch guilty verdicts, paper chases were almost always required to trace tangled payoff schemes and the illegal flow of money.

The sudden shift in directions was a difficult adaptation for many mature agents. “They have a lot to learn about how Mob guys, their union counterparts, and industries operate,” Kossler said wearily after he and Bonavolonta began briefing the new squads. “These are long, complicated cases and it makes their hairs hurt. But we have to reorient them into understanding that labor rackets is the highest priority.”

Nineteen eighty—the radical transitional year for the New York office—ended with Jim Kossler’s partner, Jules Bonavolonta, transferred to FBI headquarters in Washington. Both believed the move would benefit the long-range crackdown in New York. Bonavolonta was posted as second-in-command of the agency’s new national organized-crime squad section. The job placed him in a prime position to get quick clearance from headquarters for any daring and wild escapades dreamed up in New York by Kossler and his troops.

Bonavolonta could also assist by reducing the crippling effects of a bureaucratic legacy inherited from the Hoover era. Every eighteen months, fruitful work was interrupted when an inspection team from headquarters descended on the field office. Nitpicking auditors had to certify that all regulations were being followed, that the expenditure of every penny and the use of every paper clip had been properly authorized. Additionally, inspectors compiled reports on the number of arrests produced by each unit and each agent. It was a carryover from the Hoover days when IGB (Illegal Gambling Business) arrest quotas were used to dress up the FBIs image at budget-crunching time in Congress. Agents mockingly referred to the inspections as the “invasion of the bean counters,” and Bonavolonta kidded sarcastically that the inspectors would be unsatisfied until they succeeded in changing the FBI’s name to the “Federal Bureau of Accountancy.” The inspections had to be endured, but now Bonavolonta was strategically located to deflect and discard nuisance complaints forwarded to Washington. Almost certainly the myopic snoopers would recoil at New York’s expensive, time-consuming, organized-crime operations that failed to produce immediate measurable results. It would be up to Bonavolonta to smooth out the problems.

As the five Mafia squads swung into action, Kossler invited Bob Blakey to speak to the agents and refine their thinking about compiling evidence for RICO cases. Kossler and FBI higher-ups knew they were confronting a foe with extraordinary resources. Confidential bureau reports in 1980 grimly acknowledged that the Cosa Nostra was one of the nation’s most successful growth industries. Nationwide, it was raking in about $25 billion a year in illicit receipts—a conservative estimate. The “gross take” in the New York region before overhead expenses was estimated at between $12 billion and $15 billion, according to FBI and police department Mafia analysts.

Aware of the Mob’s robustness, Blakey never ceased telling the agents that RICO was the ideal weapon for overcoming the Cosa Nostra. “What I’d love to see you guys do is bring a case against all the bosses in one courtroom,” he told Jim Kossler over dinner one February night in 1980 at the Downtown Athletic Club in Manhattan. “I dream of indicting every boss in New York—the entire Commission.”

As Kossler picked at his food, he thought to himself that it was easy for Blakey to fantasize about massive investigations of the Mafia’s supreme leaders. The FBI was just beginning its first concentrated campaign and there was no guarantee of even small-scale victories. Kossler was a relatively low-ranking supervisory
agent in a conservative, hidebound agency. How could he sell these risky, unprecedented concepts? How could he get the resources, the money, the manpower? He realized that if he catalogued all of Blakey’s Utopian proposals in an official memorandum, top officials at the FBI and the Justice Department would believe he had gone off the rails.

Yet without anyone specifically pushing a start button, a law school professor and the handful of FBI agents he inspired set in motion the machinery for a watershed event: the Commission case, an attack at the Mafia’s heart.

The Big Boys

F
ive miles north of FBI headquarters, in a dingy storefront in East Harlem, a Genovese family leader was talking about the Commission. Indeed, he was demonstrating that body’s dictatorial reach across the country.

“Tell him it’s the Commission from New York. Tell him he’s dealing with the big boys now.”

Anthony “Fat Tony” Salerno delivered the commanding message to two envoys from Cleveland as he held court in his favorite redoubt, the Palma Boys Social Club, one morning in October 1984. The club was never a gathering site for boys or an adolescent recreational center. It was the business office and favorite meeting place of Tony Salerno, whose portly, genial demeanor belied his actual vocation. Salerno was recognized by the FBI and many mobsters throughout the nation as the boss of the Genovese crime family. Sipping coffee with his guests, Fat Tony was haranguing them to warn an upstart member of their group that New York bosses would make the ultimate decision on a leadership change in their Cleveland borgata. In effect, the New York Commission’s sphere of influence extended as far west as Chicago. If a dispute involved a borgata further west, it was resolved jointly by the Commission and Chicago’s Outfit.

Unlike other Mafia dons in New York, who were remote and reluctant to
meet with outsiders, Salerno was accessible. Mafiosi from Cleveland, Philadelphia, New England, Buffalo, and other cities considered him a conduit for relaying important information to New York’s other godfathers. They often consulted with him at the Palma Boys about internal problems that they wanted the Commission to consider and to resolve. Out-of-town emissaries always knew where to find Salerno.

The session with the Cleveland mobsters came at a time when the New York bosses were oblivious to the assaults the FBI was preparing against them, and Salerno had no qualms about invoking the supreme authority of the Commission, the Mafia’s politburo. He felt particularly safe in East Harlem, which had been the center of his cosmos as boy and man. Salerno grew up in the neighborhood when it was exclusively Italian, remaining there as it gradually metamorphosed into Spanish Harlem, a predominately Puerto Rican barrio. In the 1980s, only a tiny pocket of elderly Italians and a scattering of Italian restaurants survived along a three-block stretch on First Avenue and the incongruously named urban avenue called Pleasant. It was an old-fashioned patch that suited Salerno’s business needs. The compactness of the Italian zone was an asset, providing protection for his illicit undertakings. Prying strangers, undoubtedly cops or agents, were easily quarantined and their presence swiftly reported to Salerno’s sidekicks.

Born in 1911, Salerno came of age as a gangster in the 1930s at the dawn of the Cosa Nostra’s creation. Making his bones as a young man in the original and newly constituted Lucky Luciano family, he rose in the customary Mafia way, graduating from a loan-shark enforcer to a foreman of bookmaking, numbers, and loan-sharking activities for the family. East Harlem and adjacent Harlem were lush gambling territories and Salerno cashed in at an early age.